AGI survey optimistic of business growth

Accra, Feb 4, GNA - Business executives are optimistic that economic activities will pick up in the first quarter of this year, although the overall business perception remained unchanged in the last six months of 2011.

This was revealed by a survey by the Association of Ghana Industries (AGI).

About 66 per cent of the 250 company executives, who responded to the survey, based their optimism on expected improved market, an anticipated enhanced consumer disposable income and hopes of winning private sector contracts.

On the other hand, eight per cent of the respondents expect their business to perform poorly in the first quarter of 2012 compared to that of quarter four of 2011, citing perceived increase in utility tariffs, impact of high level of taxation and high cost of raw materials.

Presenting the fourth quarter 2011 findings of the AGI Business Barometer, which captures the prevailing business mood and expectations of Chief Executive Officers, Mr Seth Twum Akwaboah, Executive Director, AGI, said access to credit remained a topmost challenge to the business community.

Mr Twum-Akwaboah said the inability of businesses to get funding meant that they could not expand their operations and become competitive.

“The problem of access and cost of credit cut across the small and medium scale enterprises (SMEs) to the big firms as well as...the different sectors of the economy,” he said.

Whilst access to credit remained the key concern to the SMEs, depreciation of the cedi and competition from imported goods were singled out as obstacles to expansion of large and the very large firms.

On sectoral challenges, the agricultural sector identified access to credit, high cost of raw materials and price of credit as the top three factors limiting the players to provide food security and raw materials to feed the manufacturing sector.

Other obstacles to growth in the sector are lack of market for agricultural products, unfavourable weather conditions and inadequate raw materials.

In the construction sector, low access to credit, delayed payment and high cost of credit were the limiting factors to expansion.

Operators in the manufacturing sector cited high taxes, access to credit and high cost of raw materials as factors stifling growth.

Mr Twum-Akwaboah said the repeated mention of access to credit and cost of credit in the surveys conducted over the years was an indication that not much was being done to provide solutions to enable companies borrow at lesser cost to expand their operations.

Nana Owusu-Afari, President of the AGI, said the flat nature of the Business Barometer index over the years was a signal of stagnant growth in industry and urged government to bring out policies that would address challenges facing the sector.